Arla Foods amba and Milk Link have announced a proposed merger of the two dairy co-operatives.
The merger will create the largest player in the UK dairy market, which will process over three billion litres of milk per annum and have a combined turnover in excess of £2 billion.
According to a statement published on Tuesday (22 May), the two co-ops said the move “is expected to provide the basis for improved returns for Milk Link members and enable them to achieve, after a transitional period, the same level of return as enjoyed by existing Arla owners.”
The proposal will be subject to approval by Milk Link members, the Arla Foods amba board of representatives and relevant regulatory authorities.
Peter Lauritzen, chief executive of Arla Foods UK plc said: “The enlarged business will be focused on delivering a sustainable future for our farmer owners. It will mean that the largest and most progressive dairy business in the UK will be owned by Milk Link and Arla Foods amba farmers, as well as by Arla Foods Milk Partnership members, through their shareholding in Arla Foods UK plc, via their investment company, MPL.
“Arla has a strong record of investing in facilities and brands in the UK. Together we will be able to offer British retail and foodservice customers with a full range of high quality dairy products from a single, secure, source, making us an even more attractive partner for British retailers. As such, the merger will be good for our farmers, our customers and their consumers and, ultimately, the British dairy industry.”
Neil Kennedy Milk Link’s chief executive said: “The proposed merger has been unanimously endorsed by the Milk Link board with the full support of the Milk Link Member Council and we strongly believe that it will create a strong platform for a sustainable future for Milk Link members and the long term growth of a vibrant British dairy industry.
“Milk Link’s 1,600 British dairy farmer members will have a stake in one of Europe’s largest and most successful dairy businesses and play a positive role in its future development. Our farmers will benefit from Arla Foods amba’s long term strategic vision, global scale, broad product and customer base and proven track record in investing in the development and growth of leading dairy brands.
“We believe that the merger will provide the basis for improved returns for our members and enable them to achieve long-term security and, after a transitional period, the same level of return as enjoyed by existing Arla Foods amba owners. It reflects and reinforces Milk Link’s current position as one of the UK’s leading dairy businesses; recognises and rewards the loyalty and commitment of our Members and will, we believe, provide their dairy farm enterprises with long term security, stability and sustainability.”